Mixed outlook as retailers head into fall

Still, the six-store chain didn't spend all the money it allotted for fall merchandise, waiting to see if exciting items became available later. That money is still in the bank, Baskin says.

Mark Shale also is betting that camel and the menswear look will go over big with women this fall. And there are some signs that Mark Shale customers are ready for a return to jackets and blazers--and are willing to pay for them.

This summer, women customers were asking for more suits than Mark Shale carried, a big departure from previous seasons when casual fashions were the rage. And a recent in-store survey of Mark Shale buyers found that 60 percent said they would be spending the same amount on clothes this year as last year while 35 percent said they would spend more.

Indeed, not every economist is predicting gloom and doom for retailers as the weather turns brisk.

"The consumer's resilience has been remarkable," says Bank One's Swonk. "I think we're going to be in fairly good shape this fall."

Spending is likely to accelerate, she believes, boosted by lower energy costs, tax rebates and a wave of mortgage refinancing that is freeing up cash. While layoffs have curtailed spending in some sectors, incomes haven't been dropping because there's more work to do for those still employed.

`Still money out there'

"In the aggregate, there's still money out there," says Swonk, who came out in first place last year in a Tribune analysis of holiday sales forecasts.

She is predicting 2.5 percent growth in gross domestic product during the third quarter and 3.5 percent growth in the fourth quarter, far lower than the 7.6 percent pace in the first quarter of 2000, but still respectable numbers.

And Swonk isn't afraid retailers will be stuck with mounds of inventory after the holiday season as they were last year.

"A year ago the sky was no limit," she says. "Back then, everybody over-ordered. Now everybody believes the floor is no limit. We shouldn't see a lot of excess inventory for the holidays.

Merrie Spade, owner of Ami Ami, a trendy boutique in north suburban Deerfield, is one retailer banking on a strong fall season.

"I've bought lots of coats and jackets, some in ski fabric, some in wool, some in shearling. I've been selling miniskirts for early fall. I've had them in and sold out already."

One might expect Spade, who has spent 20 years in the retail business, to err on the conservative side given the late stage of the current economic expansion. But while she says she is always cautious, Spade expects sales to increase 30 percent this fall over last year.

"I can't complain about business. Every month since I opened, I've been exceeding my plan," she says. "I don't think this is slow, but I'm told I'm the only one feeling that way. My most expensive things sell the quickest."